Customers spend 10% more thanks to buy now, pay later services, Imperial College Business School finds

The ability to use buy now, pay later schemes such as Klarna increases the amount customers spend by around 10%, according to research by Imperial College Business School.

BNPL schemes also increase customers’ willingness to buy a product, with their likelihood of buying an item increasing by nine percentage points.

The research found that people who tended to buy items online using a credit card, rather than a debit card, were more likely to spend more with a BNPL scheme. Those who were more at risk of financial difficulties were also more likely to increase their spending.

The findings come from research by Dr Stijn Maesen, Assistant Professor of Marketing at Imperial College Business School, and Dionysius Ang, Associate Professor of Marketing at Leeds University Business School.

BNPL schemes have dramatically grown in the past few years, with the total number of users reaching 380 million in 2024. Whilst for many they can be a helpful, interest free way to alleviate the burden of large payments, there can also be negative effects for the purchaser, according to the researchers. 

Dr Maesen says: “The risk is that these schemes allow financially vulnerable customers to take on unsustainable levels of debt - and in response to these issues, new rules and regulations are on the horizon in the UK. However, it’s clear that for businesses, these schemes are proving incredibly beneficial for their profits.” 

He recommends that policymakers urge regulators to ensure that BNPL schemes do not have a disproportionately negative impact on those already struggling financially. This is particularly relevant, given the pressures of a cost-of-living crisis and a poor medium-term outlook for the global economy.

The researchers studied weekly data from a large US retailer who introduced a BNPL scheme, where customers could spread their cost across four separate payments. This data allowed them to make a direct comparison of sales made both before and after the BNPL scheme was introduced. 

On average, they found that introducing a BNPL option to customers meant a clear increase in sales, with customers who’d previously spend £100 more likely to spend £110 on average.

This impact was not just a short-term boost either, with customers purchasing more on average for the remainder of the study.

2024 RTIH INNOVATION AWARDS

Payments was a key focus area for the sixth edition of the RTIH Innovation Awards.

The awards, sponsored by Vista Technology Support, Scala, CADS, 3D Cloud, Brightpearl by Sage’s Lightning 50, Business France, and Retail Technology Show 2025, celebrate global tech innovation in a fast moving omnichannel world.

Our 2024 hall of fame entrants were revealed during an event which took place at RIBA’s 66 Portland Place HQ in Central London on 21st November, and consisted of a drinks reception, three course meal, and awards ceremony presided over by comedian Lucy Porter.

In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “The event is now into its sixth year and what a journey it has been. The awards started life as an online only affair during the Covid outbreak, before launching as a small scale in real life event and growing year on year to the point where we’re now selling out this fine, historic venue.”

He added: “Congratulations to all of our finalists. Many submissions did not make it through to the final stage, and getting to this point is no mean feat. Checkout-free stores, automated supply chains, immersive experiences, on-demand delivery, next generation loyalty offerings, inclusive retail, green technology. We’ve got all the cool stuff covered this evening.”

“But just importantly we’ve got lots of great examples of companies taking innovative tech and making it usable in everyday operations - resulting in more efficiency and profitability in all areas.”

Congratulations to our 2024 winners, and a big thank you to our sponsors, judging panel, the legend that is Lucy Porter, and all those who attended last week’s gathering.